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An eyewitness from a crime is asked to look through some mugshots to see if he can identify the person who committed the crime. After doing this, he sees a police lineup of suspects and identifies one of the men as the person who committed the crime because
He looks very familiar. Unfortunately, the man in the lineup looks familiar not because the eyewitness saw him commit the crime, but because he saw his face in the mugshot books a few hours ago and the eyewitness has forgotten this. This example best
Demonstrates the phenomenon of:
Decentralization
The distribution of decision-making power away from a central authority within an organization to lower levels or divisions.
Controllable Costs
Expenses that management can directly or indirectly control or influence in the short term, such as supplies and advertising.
Direct Expense
Costs that can be directly traced to a specific product, service, or department.
Departmental Contribution
The amount of revenue generated by a specific department minus the direct costs associated with that department.
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